CDC’s Report on Coronavirus in a Seattle Nursing Facility: What it Tells Us About Staffing Problems Nationwide; What We Must Do to Address Lessons Learned

April 9, 2020

The Centers for Disease Control and Prevention’s (CDC) Morbidity and Mortality Weekly Report for March 18, 2020 describes, as of March 9, coronavirus and the Life Care Center at Kirkland (Washington State): “Introduction of COVID-19 into a long-term residential care facility in Washington resulted in cases among 81 residents, 34 staff members, and 14 visitors; 23 persons died.”[1] The CDC reports, “Limitations in effective infection control and prevention and staff members working in multiple facilities contributed to intra- and interfacility spread.”

The Center for Medicare Advocacy has written before about problems with inadequate staffing, infection control, and prevention in skilled nursing facilities.[2] This Alert focuses on the second issue identified by CDC – staff members working in multiple nursing facilities – and the implications for public policy, moving forward after the coronavirus abates as the health care crisis it is today.

Why Nursing Home Workers Work Multiple Jobs

Staff members work in multiple facilities because they do not earn enough money at one facility to support themselves and their families. (Minimum wage salaries also lead staff members to work two consecutive shifts at facilities.) The lack of paid medical leave for many low-income workers also means that people go to work when they are sick. If they do not work, they do not get paid. With low wages, most lack enough savings to fall back on if they are sick and not paid.

The coronavirus pandemic brings dramatically into view the problem of allowing facilities to pay workers inadequate wages and to give them inadequate benefits. This is a national scandal, calling for a national solution, when most of the payments that facilities receive for providing care to residents come from federal payment programs, chiefly Medicare and Medicaid.

Studies of Nursing Home Workers’ Poverty-Level Wages and Reliance on Public Programs

The Paraprofessional Healthcare Institute (PHI) has written about the poverty of many people in the direct care workforce for many years.

In a 2016 report,[3] PHI reported that nurse aides, who provide most of the direct care in nursing facilities, earn “near-poverty wages.”[4] Nationwide, the median wage was $11.51 per hour, an annual salary of $19,000.[5] Half of direct care workers earned even less. Nearly 20% of workers lived in households below the federal poverty line.[6] More than a third of them (38%) relied on various public benefits, including public assistance, Medicaid, food stamps, and cash assistance.[7] Adjusted for inflation, workers’ wages had “decreased by 7 percent over the last decade.”[8] Since most of the nurse aides are female (91%) and non-white (53%), gender and race contribute to the marginalized nature of the direct care workforce.[9]

A 2015 report by Pennsylvania’s Keystone Research Center, Nursing Home Jobs that Pay, brought attention to the extensive public subsidies received by the nursing home industry in Pennsylvania and how raising the lowest-paid workers’ wages to $15 per hour would improve workers’ lives, boost state and local tax revenues, and improve care for residents by reducing staff turnover and absenteeism.[10]

Keystone reported that 14,487 nursing home employees in Pennsylvania, nearly one-third of workers earning less than $15 per hour, received assistance from Medicaid or the Supplemental Nutrition Assistance Program (SNAP, formerly known as Food Stamps), or both, at an estimated annual cost to taxpayers of $118 million.[11] These estimates of public subsidies did not include other public benefits that low-paid nursing home workers may also receive, such as “subsidized child care, heating assistance, and food banks,” and subsidized housing.[12]

The Keystone Report demonstrated, on a county-by-county basis, how raising wages for nearly 50,000 low-wage nursing home workers would bring $311 million into the Pennsylvania economy.[13]

What Must Be Done

First, policy-makers must recognize and acknowledge that federal and state payments to the nursing home industry go far beyond Medicare and Medicaid reimbursement for care and services provided to nursing home residents. Federal and state governments subsidize the nursing home industry with billions of dollars on public benefits that low-paid nursing home workers receive – Medicaid, Food Stamps, housing subsidies, child care subsidies, and more.

Next, policy-makers must take action to ensure that nursing facilities pay a living wage with their existing reimbursement. One approach was proposed in Pennsylvania.

Legislation introduced in Pennsylvania in 2015, but not passed called for ending hidden public subsidies to the nursing home industry. The Nursing Home Accountability Act would have created a Nursing Facility Living Wage Certification program and imposed a penalty on each nursing facility whose employees received public assistance, with the amount of the penalty based on the “actual cost of providing public assistance to each covered employee for the most recent fiscal year.”[14] The Pennsylvania Bill should be a model for national legislation.

Pennsylvania Bill: Nursing Home Accountability Act (House Bill 1449[15] (Rep. Ed Gainey) and Senate Bill 1057[16] (Sen. Daylin Leach)) offered a legislative approach for requiring the nursing home industry to pay for the health insurance for its workers, instead of shifting the costs to taxpayers. Among the “Findings and Declarations” in the Bill are that:

“Nursing facilities are predominately taxpayer-funded through reimbursements from the medical assistance program and Medicare program”[17]

“Taxpayers should not subsidize nursing facilities to reap profits while many of their employees are living in poverty.”[18]

The Pennsylvania Department of Labor and Industry reports, “the average wage for nurse assistants is $13.39 and the average wage for dietary and housekeeping employees is $9.81.”[19]

PathWays PA, a not-for profit Pennsylvania organization that provides services and advocacy for women, children, and families,[20] finds, “a wage of $15 per hour would meet the sufficiency standard for many, but not all, counties of this Commonwealth for an employee with one child to provide for the employee and child without the need for public assistance.”[21]

“A worker who faces low wages or part-time work, or both, is too often eligible for taxpayer-funded medical assistance instead of affordable, employer-based coverage. Controlling health care costs can be more readily achieved if a greater share of working people and their families have health benefits so that cost shifting is minimized.”[22]

Accordingly, the proposed Pennsylvania Nursing Home Accountability Act had four purposes, to:

Create a living wage certification program for each nursing facility that provides a base hourly wage of $15 per hour for each directly employed or subcontracted employee of the nursing facility.

Encourage the provision of a living wage to each nursing facility employee by providing information to each nursing facility resident and the public on the wage rate paid to the employees of the nursing facility.

Ensure that each nursing facility pay a nursing facility employer responsibility penalty for health coverage received by each employee of the nursing facility through the medical assistance program and another public assistance program that is fully or partially funded with funds from the Commonwealth, with that penalty based on the costs incurred by the Commonwealth for providing these benefits to the employee of the nursing facility.

Ensure that each nursing facility employee who receives public assistance is protected from possible retaliation by the nursing facility for seeking or obtaining that assistance.[23][

There were two key components of the legislation:

Nursing Facility Living Wage Certification program “requires each facility participating in the Medicaid program to report” information,[24] in a verifiable and auditable form,[25] about the minimum base hourly wage paid for each job classification and the number of employees in each classification. The Department of Public Health will give a “living wage certification” to each facility whose wages meet the living wage certification standard,[26] which is defined as $15 as a base hourly wage, adjusted annually.[27]

Nursing Facility Employer Responsibility Penalty imposes a penalty on each facility whose employees are receiving public assistance, with the amount of the penalty based on the “actual cost of providing public assistance to each covered employee for the most recent fiscal year.”[28] The Bill authorizes limited administrative appeals: facilities can “only challenge whether the Department correctly determined the number of covered employees that are the subject of the penalty.”[29] The Department of Human Services can deduct any unpaid penalty and interest from Medicaid payments that are otherwise due the facility[30] and the Department of Health can refuse to renew the license of a facility that has not paid the penalties and interest or agreed with the Department on a plan of installment payments.[31] The Bill provides for interest payments;[32] prohibits practices that designate employees as independent contractors, prohibit employees from enrolling in public assistance, or discriminate against employees enrolled in public assistance;[33] and provides for employee remedies.[34]

Conclusion

The nursing home industry is a multi-billion dollar industry, with most of the reimbursement coming from the federal and state governments through the Medicare and Medicaid programs.

Keystone Research Center’s Executive Director and report author, Stephen Hertzneberg, said, “The nursing home industry can afford to raise wages. It is time for public officials to demand an end to the corporate welfare we are giving the industry.”[35] As the Pennsylvania Nursing Home Accountability Act expressly declares, “Taxpayers should not subsidize nursing facilities to reap profits while many of their employees are living in poverty.”[36]

As our experience with the coronavirus shows us, all people are affected by a pandemic. Similarly, one person can inadvertently lead to the spreading of a virus throughout a facility and community.

The United States recognized the need for health care for everyone in the Families First Coronavirus Response Act,[37] which requires emergency paid sick leave and paid family and medical leave for certain workers during the coronavirus pandemic and national emergency (although health care providers have special rules and may exempt employees[38]).

But what about afterwards? Policies for paid sick need to be both universal and permanent. And all workers need a living wage.